Jersey has made no secret of the fact that it strives to be a leading jurisdiction for private wealth management and that it is open for family office business. Determining the number of family offices currently in Jersey is not a straightforward task as there is no universally accepted definition, and no publicly accessible register. However, if one takes the view that a single family office must comprise of a wealth holding structure (company, foundation, trust, etc.) which was established for the benefit of a single private individual and the members of his/her immediate family and that the net value of the private wealth held by and/or administered by that structure is in excess of US$500,000,000, then, the author's conservative estimate would be that there are between 20 to 25 such single family offices currently operating in or from within the Island.

Whilst all aspects of the Island's private wealth industry continue to expand steadily, local trust practitioners report a noticeable upswing in the number of enquiries regarding either the establishment of a new family office in Jersey or the relocation of an existing family office to Jersey.

The fact that several high net-worth individuals have selected, or are actively considering selecting, Jersey as a home for their wealth is no great surprise as the Island has a number of features which make it ideally suited as a base for a sizable family office including the jurisdiction's longstanding political stability, tax-neutrality, convenient location, reputable courts, well-established and comprehensive legal system, robust regulatory regime, and good communications and transportation links.

Geographic and political context

Before expanding on these attributes it is necessary to put the Island in context. With a poetical flourish the celebrated French novelist Victor Hugo, an erstwhile political exile in Jersey, once described the geographical situation in these terms "Les îles de la Manche sont des morceaux de France tombés dans le mer et ramassés par l'Angleterre." (lit. trans. – The Channel Islands are parts of France thrown in the sea and picked up by England).

Jersey, the largest of the Channel Islands, is a self-governing island approximately nine miles by five miles in size, with a resident population of just over 100,000 people. It is conveniently positioned between the United Kingdom and mainland Europe being a mere 20 kilometres from France and less than one hour's flight away from London. Whilst it is technically a "possession of the English Crown" with close ties to the United Kingdom, it is self-governing and has its own financial, legal and judicial systems. It owes its independence largely to a quirk of medieval history; in 1204 Jersey remained loyal to King John of England following his forfeiture of most of his possessions in mainland France to the King of France, Philippe Augustus, and the consequential division of the Duchy of Normandy. Owing to their proximity to France and their strategic importance during the One Hundred Years War, all of the Channel Islands received several privileges, benefits and concessions from a succession of English monarchs during the 14th and 15th Centuries which have remained in place ever since.

Jersey finance industry commenced in the early 1960s when several international banks first opened branch offices in St Helier, the Island's capital. From those initial, small seeds, Jersey has now blossomed into a significant international financial centre (IFC).

Jersey now has a well-developed, mature business environment with a number of key institutions, chief amongst which are (i) the Jersey Finance Services Commission (JFSC) – the Island's regulatory authority with a mandate to maintain Jersey's position as an international finance centre with high regulatory standards; (ii) Jersey Finance, the Island's business development and public relations institution which aims to champion the competitive position of Jersey's finance industry, both locally and internationally and (iii) Locate Jersey, an initiative of the States of Jersey (the local government) which hopes to encourage businesses and high net worth individuals to relocate to the Island. Jersey's principal and oldest court, the Royal Court, exercises a civil and criminal jurisdiction and regards itself as being a "court of equity". Since 1961 there has been a separate Court of Appeal which sits roughly six times each year. Further appeals can be made to the Judicial Committee of the Privy Council, but only with special leave.

The number of Jersey residents working in the Island's finance industry now stands at more than 13,000 – the largest of any Crown Dependency or Overseas Territory – providing genuine choice for any principal or manager of a family office. Furthermore, the Jersey Branch of the Society of Trust and Estate Practitioners (STEP) has more than 1,200 active members, the highest percentage of any STEP branch calculated by reference to the number of adults in employment in each jurisdiction's finance industry. This makes Jersey a rich soil for any family office looking to lay down its roots. There is a good supply of accountants, company administrators, bookkeepers, trust officers and so on in the Island making it a relatively easy place for any high net worth individuals (HNWIs) wishing to establish a family office to find and recruit appropriately qualified staff. This resource is likely to become an increasingly important factor for HNWIs to consider in the future with the implementation of new international "economic substance" standards which will, in broad terms, require IFCs to ensure that any profits registered by an entity in a jurisdiction are commensurate with that entity's activities and presence.

It is also worth noting that Jersey's government recognises the importance of information technology to the Island's future prosperity and actively supports all forms of digital business. In 2013 it established an economic development agency and industry association, Digital Jersey, to act as a central resource and point of contact for anyone looking to test or establish a digital business in Jersey. It has overseen an Island-wide rollout of a full-fibre broadband network to more than 40,000 homes and business premises, thereby ensuring that Jersey now has some of the highest download speeds found anywhere in the world.

A flexible regulatory regime

Most family offices based in Jersey organise their activities in a way which fits comfortably in or alongside Jersey's regulatory regime, a framework which is designed first and foremost with public confidence in mind. The key statute is the Financial Services (Jersey) Law 1998 (FSJL). By Article 7(1) of FSJL it is a criminal offence for a person being a company incorporated in Jersey to carry on financial services business in any part of the world unless (a) that person is a registered person (i.e. it holds the appropriate licence issued by the JFSC and it acts in accordance with the terms of its registration or (b) it is exempt from registration under the terms of the statute or one of the ancillary orders.

Acting as a trustee of an express trust or as the director of a company in or from within Jersey by way of a business would ordinarily constitute "financial services business" and so one would think that as most family offices are constructed around a mix of trusts and/or companies they would require a "trust company business" (TCB) licence issued by the JFSC. As one would imagine, the JFSC's licensing policy demands high standards of competence, integrity and financial standing and any applicant for a TCB licence would first need to satisfy the JFSC's stringent criteria (for example, by demonstrating that the applicant had adequate risk management systems, financial resources and insurance). The Island's policy makers acknowledge and respect the fact however that family offices very rarely, if ever, solicit financial services business from members of the general public and so have included several sensible provisions and exemptions in the FSJL which make it possible for a family office to operate in the Island under a considerably lighter regulatory regime than a "fully regulated" trust company business. By way of an example, in one case known to the author the JFSC has issued a relatively small, single family office operating in Jersey with its own TCB licence (in order that the family office could then hold itself out to other financial institutions as being a regulated entity) and exempted the family office from some of the more onerous criteria which a "fully fledged" trust company business would ordinarily have to have met. As a quid pro quo for these concessions, the JFSC imposed certain conditions on the TCB licence such that the family office could never carry out any regulated activity for anyone other than the principal and the members of his immediate family.

Another, commonly seen, structure for a family office based in Jersey involves the use of one or more private trust companies (PTCs). These PTC structures make use of a specific, self-certifying, family-office friendly exemption found in the bracket-rich and blandly titled Financial Services (Trust Company Business (Exemptions))(Jersey) Order 2000. Under the terms of that Order, provided that the company which is carrying on trust company business in Jersey meets certain, relatively straightforward criteria, then it is exempt from the requirement to obtain its own TCB licence. In brief, the purpose of the company must be either to provide trust company business services in respect of a specific trust or trusts or to act for that purpose and to act as a member of the council (but not as the qualified member) of one or more foundations. The company cannot solicit from or provide trust company business services to the public, and it must be administered by a person holding a TCB licence. Lastly, although the name of the company must be notified to the JFSC, it is neither necessary for the company to complete any application form nor to pay any registration fee to the JFSC.

There are also similar exemptions for "private trust foundations" (PTFs) and "private protector companies" (PPCs) under Jersey's regulatory regime, making it possible to design virtually any family office structure a principal might require which can operate in or from within Jersey in accordance with an accommodating and sensible regulatory framework.

Legal system

Jersey law has its own distinctive character, particularly in matters relating to land rights, insolvency and succession. Over the centuries the law of Jersey has drawn upon very different systems and sources including Norman Customary Law (the law which existed in continental Normandy prior to the French Revolution), the French Civil Code, and English common law. The areas of the Island's law which are likely to be of most relevance to a family office (contract law, company law, private international law, trust law etc.) though are largely derived from English law principles and the accompanying English law authorities are generally considered to have persuasive authority in the Royal Court of Jersey.

Trust law

The Island's legal framework is strongly supportive of the family office sector. The classic private wealth holding structures, "fully discretionary" trusts (usually with protector provisions) and wholly-owned holding companies, are a mainstay of Jersey's private client industry and remain popular with family offices. Other, newer, entities and features have been introduced or adapted in order to ensure that the Island's suite of financial products and services is complete, user-friendly and up-to-date.

Jersey's solid reputation as a leading jurisdiction in the family office sector is due in part to its well-developed legislation. Not wishing Jersey to rest on its laurels, the Island's Government ensures that the main financial statutes are regularly reviewed and updated so that they remain current and in tune with the ever-evolving demands of industry. For instance, the Trusts (Jersey) Law, 1984 (TJL) was amended in 2018 following a lengthy consultation exercise. The latest round of changes (which include a new provision dealing with the disclosure of information to beneficiaries, the extension of the amount of indemnification which a trustee and its officers and employees are entitled to receive and a revision of the rules governing the accumulation of income) have been warmly received by trust practitioners.

Until relatively recently, Jersey followed English law in recognizing only trusts either declared in favour of beneficiaries or established for charitable purposes. Following an amendment to the TJL in 1996 however it is now possible to set up trusts which are neither charitable nor for a class of beneficiaries, but for a stated purpose. The only major limiting factors are that the non-charitable purposes must be clear and cannot be immoral, illegal or contrary to public policy. In addition, a person known as the enforcer must be appointed to enforce the terms of the trust. This change in Jersey law has opened up endless possibilities for family offices and their advisors. For example, an entity which needs to be taken off a corporate balance sheet or out of the principal's personal estate for asset protection and/or succession reasons can be quickly and efficiently "orphaned" by means of a purpose trust.

A reserved power trust (a type of trust which allows a third party (usually, but not always, the settlor of the trust) to retain certain key powers in respect of the trust property) is permissible under Jersey law. With appropriate drafting almost any aspect of the trust may be made subject to a reserved power, including the investment of the trust property, and who may benefit from the trust. Such trusts are popular with the principals of several family offices as they can offer a degree of control but without compromising the integrity of the trust itself. However, they need to be employed with a degree of care; the reservation of powers can give rise to fiscal and asset protection issues in some circumstances.

Family offices sometimes have very long-term aims and objectives which can be difficult to implement in certain jurisdictions. For instance, English trust law has historically imposed strict rules on excessive perpetuity periods and the accumulation of income and at common law any trust which infringed those rules was usually void from the outset, although their severity has subsequently been modified and softened in part by statute. Conversely Jersey has always adopted a much more liberal approach in this regard. Jersey has never had a rule against either perpetuities or excessive accumulations and since 2006, unless the terms of the trust instrument provide otherwise, a Jersey proper law trust may continue in existence for an unlimited period. These helpful rules make a Jersey trust a very useful device in a family office's toolkit. For example, one could settle a "dynastic" Jersey proper law trust capable of making an award or bursary in memory of a family member which could, in theory, continue forever.

In common with many other international finance centres, Jersey's trust law contains robust "firewall" protections for trust property. The "firewall" provisions ensure that certain key issues regarding a Jersey proper law trust (for example the capacity of the settlor, the interpretation of the trust instrument and the existence and extent of any powers) must be determined in accordance with Jersey law exclusively. Further, and a matter of Jersey's private international law rules, any judgment of a foreign court with respect to a trust shall neither be enforceable, nor given effect, by the Jersey Court to the extent that it is inconsistent with the "firewall" provisions. The net result is that the Island's legal system offers significant protection to any property which is settled into a Jersey proper law trust from any hostile claims brought by creditors, spouses and beneficiaries made outside of Jersey, as well as protecting the trust property from the potential application of any foreign forced heirship rules.

New vehicles

Whilst the most well-known and well-established private wealth holding structures, such as Jersey proper law trusts and Jersey incorporated limited liability companies, remain evergreen and popular, a significant percentage of private clients and their advisors are now willing to consider other, newer vehicles. Fiscally transparent entities such as limited partnerships are also becoming an increasingly popular choice for family offices by dint of the fact that they usually benefit from a simple and straightforward tax treatment in the investor's place of residence.

Very recently Jersey has introduced two pieces of new legislation specifically targeted at growing its appeal as a leading IFC which may well be utilized by family offices in the future. The new Limited Liability Partnership (Jersey) Law 2017 came into force on 1 August 2018 and has completely overhauled Jersey's existing Limited Liability Partnership (LLP) legislation, originally introduced in 1997. It is hoped that this move will make Jersey LLPs even more attractive as a more streamlined cutting-edge structure for investors. Hard on the heels of that development, the States of Jersey adopted the draft Limited Liability Companies (Jersey) Law 2018 in September 2018 and it is expected that the statute will to come into force at some point in the first half of 2019. Limited liability companies (LLCs) combine the limited liability protection of a company with the constitutional flexibility and privacy of a partnership whilst enabling a choice between the management structures and the tax treatment of both.


Philanthropy can form an important element of a family office's work. The common pursuit of not-for-profit objectives can help to promote, develop and maintain values, harmony, unity and cohesion amongst family members. Charitable activities are also sometimes seen as a "nursery slope" within a family office context; a means of providing the junior members of a particular family with the opportunity to "learn the ropes" and to gain valuable life experience and skills.

Jersey caters for this demand in a number of ways. For example, foundations have proved to be popular for wealthy families wishing to establish an entity for a particular philanthropic purpose because they are flexible, adaptable and most significantly "ownerless" vehicles. More than 400 foundations have been incorporated in Jersey since 2009 when the Foundations (Jersey) Law was first enacted and, whilst there is very little information about their activities in the public domain, anecdotal evidence would suggest that approximately one-third of them have charitable objects.

A foundation is similar to both a company and a trust in certain respects. It resembles a company in that it is a body corporate (albeit one without any shareholders) and is governed by a council in accordance with its charter and regulations in much the same way that a company is managed by its board of directors. It is akin to a trust in that a foundation must have one or more objects which may be a purpose (charitable or non-charitable) and/or be for the benefit of one or more beneficiaries. The statute provides that a beneficiary under a foundation is not owed by the foundation or by a person appointed under its regulations a duty that is or is analogous to a fiduciary duty. The foundation, like a company but unlike a trust, has separate legal personality and may contract, sue or be sued in its own name. A foundation is subject to the Island's insolvency regime but, unlike a company, not having any shareholders is not subject to any maintenance of share capital provisions. These features make foundations ideally suited for use as a central "hub" entity for a family office's not-for-profit activities.

In addition Jersey has recently updated and overhauled its charities law. The Charities (Jersey) Law, 2014, which came into force in stages, has amongst other things created the office of the Jersey Charity Commission and established a new register of charities. The hope and expectation is that the new statute will promote the Island as a centre for the good governance of public charities and for philanthropic activity generally.

Recent judgments

Jersey's Royal Court has played its part too in ensuring that Jersey remains a top-flight IFC. It has determined many novel and interesting trust law points in the past and it has an excellent reputation in this area; Jersey trust law judgments are routinely cited in, and followed by, the courts of several Commonwealth jurisdictions. It has the experience, infrastructure and flexibility to be able to handle the most arduous and complex of cases as admirably demonstrated recently by its determination of the series of actions which came to be collectively known as the "Alhamrani litigation". This massive piece of international trust litigation began in 2003 and was probably the largest case ever to be listed in Jersey. After several years of preliminary litigation involving over 120 interlocutory actions and a discovery process involving more than six million separate documents, the case was eventually set down for a hearing scheduled to last for two years. The trial began in November 2008 and continued until early September 2009 when the claims were discontinued following an agreed settlement. The Jersey court and its officers made bespoke arrangements for the case, including the rental of a hotel over the winter season for use as a temporary court room, and throughout this period were able to accommodate it successfully without any discernible inconvenience to other court-users.

Most recently a series of cases came before the Royal Court which concerned several so-called "insolvent trusts" (known collectively as the "Z Trusts case", the latest judgment in the series being [2018] JRC 119). The Z Trusts case raised some important issues about the impact of insolvency on trust structures, including the ranking of the different liabilities incurred by former and successor trustees. There was little or no judicial authority on these issues in Jersey or elsewhere. The Royal Court, undaunted by the prospect of a voyage through largely unchartered legal waters, has now produced helpful guidance which will be of great use and comfort to current trustees, former trustees with continuing liabilities, and creditors alike.

The Jersey court has adopted a pragmatic and sensible approach to cases which involve non-contentious, private client matters. For example, if a case concerns a private trust then, depending on the facts, it is normally willing to anonymise public records of court proceedings and judgments and permit hearings to be held in private in order to maintain the privacy and confidentiality of beneficiaries. This sentiment was pithily summarised by Sir Philip Bailhache (HM's Bailiff as he then was) when giving judgment in the case In re Sanne Trust Company Limited [2009] JRC025B in these terms:

"… in this jurisdiction, considerable importance is attached to the confidentiality of private trusts. It is for that reasons that administrative applications under [the Trusts Law] are customarily heard in private."

A good example of this approach may be found in a case heard in 2017. In that action the trustees sought the Royal Court's approval on behalf of minor, unascertained and unborn beneficiaries to significant and far-reaching variations of certain trusts within a large family office structure. The definitions of "child", "issue" and "descendants" in those trusts excluded as beneficiaries children who had been born into a same-sex relationship, adopted at over two years old, or born to unmarried parents who had not cohabited for more than two years. One of the adult beneficiaries was the parent of minor children born into a same-sex relationship and the trustees wished to extend the definitions believing that the present arrangements were likely to cause unhappiness and dissention in the family in the future. All of the adult beneficiaries supported the proposed variations. The Royal Court heard the trustee's representation and approved the variations in private but, noting that the legal issues raised by the case were of general interest to trust practitioners, it subsequently published an anonymised judgment.

Jersey Court is well acquainted with trustees seeking the assistance of the court when taking what are commonly referred to as "momentous decisions", a description taken from the leading English case, Public Trustee v Cooper. The jurisdiction of the English chancery court to grant blessings to trustees was first followed and adopted by the Jersey court in 2001 (In re S Settlement [2001]) and there have been a steady stream of applications subsequently.

The case law mentioned above is merely a small selection of a range of interesting judgments relating to international ultra-high net worth families handed down by the Royal Court of Jersey in recent years.

When the high calibre of Jersey's judiciary is taken together with the Island's advantageous geographical situation, benevolent tax regime and longstanding respect for the rule of law, there can be little doubt that Jersey truly is a natural home for a family office.

An original version of this article was first published by The International Family Offices Journal, Apri.